Leading the WAy: Western Australia is the key to driving LNG as a marine fuel
Uniquely positioned globally, logistically and financially, resource rich, Western Australia is poised to lead the establishment of liquefied natural gas (LNG) as a marine fuel in the Asia Pacific region. Maritime trade is vital to the global economy, but is a major source of atmospheric pollution. This paper considers how tightening restrictions on marine exhaust emissions will affect vessel owners and the shipping trade, and why LNG offers a clean, safe and economically viable option to meet the new restrictions. Western Australia’s bulk iron ore export trade to Asia offers sufficient critical mass to underpin the creation of this new LNG bunkering industry. A design has already been completed for a new bulk ore carrier capable of running on both conventional heavy fuel oil and LNG and meeting the new emissions requirements. The LNG Marine Fuel Institute has analysed the demand and supply side business cases required to get this industry started. On the demand side, its modelling concludes that LNG-powered vessels can be economically viable if bunkering LNG is priced in the range of US$7 to $10/mmBtu. On the supply side, this price is achievable from an initial commercial scale 0.5 mtpa LNG bunkering facility if the natural gas feedstock can be priced in the range of AU$5 to $7/GJ (excluding pipeline charges). Such a plant would require ~75 TJ/d of natural gas feedstock. Western Australia’s domestic gas market is well positioned to meet this demand in terms of both price and volume. The benefits of this new industry would extend to Australian bulk exporters, gas suppliers, ship owners and operators, infrastructure owners and Australian governments.